Key points

  • 2012 was apparently the wettest year on record in the UK, with insurance payouts topping £1.19 billion for flood-related damage.
  • The Law Society suggests that more consideration should be given to the question of flooding, and insurance against flood damage, before contracts are exchanged.

Background

There are many types of flooding, of which coastal/tidal and river flooding are but two. Approximately half of all flooding damage arises from surface water or groundwater flooding, and there is no need to be anywhere near the coast or a river for these to happen. They usually occur when heavy rainfall overpowers the drainage system, or where the ground is already so saturated that neither the soil nor the water table can absorb or cope with any more.

Weather cycles in the UK seem to be becoming more erratic, and weather patterns more extreme. Bouts of heavy rain are therefore happening more frequently, and with ever more expensive consequences.

Aside from the physical damage, flood risk may mean it is difficult to secure a mortgage on a property or to sell it at a later date. And, during ownership, it might be difficult to find insurance cover at a reasonable and/or affordable price, and on acceptable terms and conditions (e.g. the level of excess). All or any of these can have an adverse effect on the value of the property.

The Law Society has therefore urged solicitors - and their clients - to give more consideration to the question of flood risk, and insurance against flood risk, before a party becomes contractually bound to buy a property or to take a lease of it or to lend money against it. That is to say, at the pre-contract or pre-agreement stage of the transaction.

These are, of course, concerns for existing owners and occupiers as well, who may also wish to act on this issue.

Things to consider

Whether the property involved is residential or commercial, the Law Society's advice is that it is insufficient simply to rely on the Environment Agency's flood map or on the Land Registry's flood risk indicator. Prospective buyers, tenants and lenders might therefore wish to consider arranging for a specialist search to be carried out, or even an on-site survey.